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Anglo American Platinum to cull 3,700 jobs as metal prices fall

By Nithya Bose in Business News, posted February 20, 2024

Anglo American's platinum division will axe as many as 3,700 jobs in South Africa.

Anglo American Platinum (Amplats) said the downsizing comes after a major downturn in platinum prices, affecting its profitability.

The reduction represents nearly 20 percent of its workforce, with an additional 620 contractor roles under review.

This decision comes after Amplats, 79 percent owned by Anglo American, experienced a dramatic 71 percent decrease in profits in 2023, dropping to R14 billion from R48.8 billion the previous year.

The company has attributed this decline to macroeconomic instability and a 35 percent drop in platinum group metals prices.

It’s notably impacted by reduced demand for palladium and rhodium.

These metals are crucial for manufacturing catalytic converters in petrol and diesel vehicles, which have decreased demand as the automotive industry shifts towards electric vehicles.

This move adds pressure on Anglo American, a leading entity in the FTSE 100, which has recently seen a significant reduction in its market value.

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It led to speculations about it becoming a potential takeover target.

The decline in Amplats' performance, amid rising production of electric vehicles, affects demand for certain metals.

It’s a critical concern for Anglo American, especially before its annual results announcement.

Amplats CEO, Craig Miller, highlighted implementing various cost-reduction strategies to combat these challenges.

However, the persistent low metal prices necessitate additional actions.

The company initiates a consultation phase with unions and staff, post which the exact number of job reductions will be determined.

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